Bristol-Myers sees flagging '02 profit

Stock gets boost from positive outlook for 2003, upgrade

TedGriffith

NEW YORK (CBS.MW) -- Shares of Bristol-Myers Squibb rose Friday, after the drugmaker warned it expects a 2002 profit decline, but also offered an optimistic outlook for 2003.

Shares of Bristol-Myers closed up $1, or 2 percent, to $50.

The pharmaceutical company said late Thursday it expects to earn between $2.25 per share and $2.35 per share in 2002, compared with the $2.41 per share it expects to earn this year. Bristol-Myers had been expected to earn $2.57 per share in 2002, according to the average estimate of analysts polled by Thomson Financial/First Call.

In connection with this year's restructurings, Bristol-Myers also said it will take a fourth-quarter charge of between $350 million to $500 million.

To reduce costs, Bristol-Myers has been shedding jobs this year, with about 4,000 positions eliminated through layoffs and attrition. The company has also been making acquisitions to expand its line of medications. It recently completed its acquisition of the pharmaceutical unit of DuPont
DD, +0.23%

Bristol-Myers is the second major pharmaceutical company this week to announce a profit warning. On Tuesday, industry bellwether Merck & Co. warned that it expects profits to be flat next year

Bristol-Myers said it to hopes to rekindle earnings growth in 2003 with new medications the company has developed or licensed the rights to. The company said it would resubmit its application Friday for government clearance to sell the high blood pressure treatment Vanlev.

The company said it also has high hopes for an experimental cancer treatment called Erbitux, which Bristol-Myers licensed from biotech firm ImClone Systems
IMCL, +51.20%

Following the company's comments, analyst Tim Anderson at Prudential Securities upgraded his rating on Bristol-Myers' stock to "buy" from "hold." In a note to clients, Anderson said he sees promise in Vanlev and Erbitux. He also said the stock is attractively valued relative to other major drugmakers.

"The company is taking an expected bath in 2002, like one of its peers did recently, but within the next year or so the company should have three new and interesting products on the market," Anderson wrote.

Bristol-Myers didn't offer specific forecasts for 2003.

"While it is too early to give specific [earnings per share] guidance for 2003, I feel very confident that 2003 will mark the beginning of our return to another extended period of consistent growth in future earnings," Peter Dolan, Bristol-Myers' CEO, said in a statement.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.